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A key decision in the physical design process is:
Absorption Costing
A bookkeeping approach incorporating the total manufacturing expenses, which include the cost of direct materials, wages for labor directly involved in manufacturing, and all overheads, be they variable or fixed, into the product's cost.
Fixed Manufacturing Overhead
Costs associated with the production process that do not change with the level of output, such as rent, salaries, and utility expenses.
Production Volume
The total number of units of a product or service produced over a specific period.
Sales Volume
The total number of units of product sold during a specific period.
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